CODEL DURBIN'S MEETING WITH GREEK OPPOSITION

UNCLAS SECTION 01 OF 02 ATHENS 000250

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV ECON OVIP ENRG TU GR
SUBJECT: CODEL DURBIN'S MEETING WITH GREEK OPPOSITION
LEADER PAPANDREOU

REF: ATHENS 207

Summary
--------------

1. (SBU) In a wide-ranging discussion February 18, Senator
Durbin and main opposition PASOK party president George
Papandreou shared views on the global economic crisis,
Cyprus, Greek-Turkish relations, Afghanistan, and other
issues. They agreed that the international goodwill
surrounding the new U.S. administration provided an
opportunity to make lasting reforms in the global economy --
including expansion of renewable energy -- and to improve the
global image of the U.S. Papandreou stressed the "closeness"
he feels with the U.S., the country of his birth, and he
argued that the U.S. is "the only power in the world" able to
take the lead in promoting our shared democratic values. He
added that Greece would be ready to do its part under a
future PASOK government. Papandreou expressed admiration for
the recently signed U.S. economic stimulus package, and said
he wished the EU would consider something similar.
Unfortunately, he said, Germany had taken the lead in holding
back the EU's reaction to the economic crisis, based on what
Papandreou considered a misguided commitment to fiscal rules
that made little sense in a recession. Noting his role as
current head of the Socialist International, Papandreou
explained his work with leaders in the Muslim world and
elsewhere to find peaceful ways to resolve disputes and to
deal with terrorism. He said he would be open to U.S. ideas
if there were ways he could help build connections to
confrontational leaders anywhere in the world. End Summary.

"Time to Work Together"
--------------

2. (SBU) Papandreou began the meeting with Senator Durbin,
Illinois Treasurer Alexi Giannoulias, and the Ambassador by
offering congratulations for the election of President Obama
and by noting how his own life story was deeply connected
with the U.S. (including a year Papandreou spent in high
school in Elmhurst, Illinois). Durbin noted the wide range
of challenges facing the new administration, including the
global economic crisis, Iraq, and Afghanistan. Durbin also
shared impressions of his recent visit to Cyprus, including
the prospects for progress this year in the negotiations, as
well as weaknesses in civil society. Papandreou thanked
Durbin for his work in the Senate on Greek-Turkish relations
and other issues of importance to Greece. Papandreou said
that now is the time for us to work together, and he endorsed
what he called President Obama's "message to world" to solve
our common problems. Papandreou said that although Greece is
a "smaller country," it can contribute to stability in
surrounding regions, and he noted in particular Greece's
historic relationships with the Muslim world.


3. (SBU) Durbin noted the importance of President Obama's
first Executive Order on Guantanamo, torture, and ensuring
humane standards for rendition, and Papandreou expressed
strong support, adding that he had publicly used the
President's statement about security and freedom not being
mutually exclusive. He agreed that there is currently an
opportunity for the U.S. to create a different image around
the world, observing that in the past it was easy for groups
opposed to our shared democratic values to point to torture
as a way to discredit the U.S. Papandreou said that while
the U.S. could not "dictate solutions," it was the "only
power in the world that can lead" in promoting our values.
Papandreou said we would have his support in this effort.

Seeking a Large EU Stimulus
--------------

4. (SBU) Papandreou said that early parliamentary elections
were a real possibility in Greece, and he noted that opinion
polls showed PASOK would likely win. He stressed that the
current government had been weakened by internal and external
crises, and Greece needed a new government that would have
the credibility with society to make difficult decisions and
to mobilize people. Telling the delegation "we can work with
you," Papandreou noted that his top priority in government
would be the same as President Obama's: dealing with the
economic situation. Papandreou said it would be in the
interest of both Greece and the U.S. to push the EU to
consider a larger stimulus package on the model of the U.S.
stimulus. He said the EU should do its part to encourage
investment for the good of the global economy. Papandreou
lamented that the EU's cumbersome rules and the opposition of
key members -- especially an overly inflation-phobic Germany
-- had constrained the EU response to the crisis. He called
for the EU to relax its "master criteria" that require member
states to run no more than a 3 percent budget deficit,
arguing that these rules made no sense in a recession. He
also expressed support for ending disparities in interest
rates for loans within the euro zone.

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5. (SBU) Durbin noted that energy independence was a key goal
of the U.S. stimulus, and that the package's investment in
renewable energy had resonated with the U.S. public.
Papandreou agreed, noting it would be possible "to power
Greece only with wind." He expressed support for new
windmills based on traditional Greek designs, so that tourist
areas would embrace them as part of the Greek "brand" rather
than opposing them as an eyesore. He added that Greece had
the potential to do more with solar, water, and geothermal
power. Papandreou also agreed with the Ambassador's
suggestion that Greece look at developing its communication
infrastructure, noting the economic benefits of expanding
broadband access.


6. (SBU) Asked by Durbin for his views on trade, Papandreou
emphasized that he was not a protectionist, but instead took
the social democratic view that markets should be open but
governed by rules to encourage development. He said he would
like to see an organization like the IMF that would do more
to put clear, strict international rules on financial
development, "geared toward where we want to move the
planet," including greater use of renewable energy. He
expressed support for "incentives for free competition" in
the WTO that would over time improve the poor conditions that
workers currently face in many poor countries. Papandreou
said both the U.S. and EU should be more open for trade in
agriculture. He noted that Greece could do well as a niche
producer of high-quality agricultural goods in a more
competitive market.


7. (SBU) Giannoulias asked about the alarming growth in
Greece's public debt, and Papandreou agreed it was a problem,
unlike private debt and toxic assets, two problems Greece had
largely managed to avoid. Papandreou said Greece lacked of
competitiveness, and this could be dealt with through
modernization, including moving toward a green economy. He
noted that Greece was made more vulnerable to the global
financial crisis because its banks had invested heavily in
the Balkans. He peppered the delegation with questions about
how the U.S. was responding to the current economic
challenges in the areas of real estate, unemployment, and
public transportation. Durbin and Giannoulias noted the
importance of infrastructure investment as part of the U.S.
stimulus.

Papandreou's International Outreach
--------------

8. (SBU) Papandreou said his position as leader of the
Socialist International had given him access to a wide range
of leftist parties around the world, some in power and some
not. Noting that he had helped eastern European communist
parties to democratize after the fall of the Berlin Wall,
Papandreou said he would be willing to reach out to
confrontational leaders in Latin America or elsewhere in the
world if the U.S. thought he could be of use in building
connections. Papandreou noted that the Socialist
International had brought together Palestinian and Israeli
parties to discuss peace plans, and that he had discussed
with Pakistani President Zardari the idea of setting up a
committee to find ways to isolate terrorist groups without
relying solely on force. Papandreou added that he had doubts
about the wisdom of Zardari's recent cease-fire agreement
that permits Sharia law in parts of Pakistan, but he
understood that Zardari was in a difficult situation.
Papandreou said he had developed contacts with such countries
as Syria and Iran during his tenure as Foreign Minister
(1999-2004).


9. (SBU) Turning to Turkey and Cyprus, Papandreou stressed
that as Foreign Minister he and his Turkish counterpart, the
late Ismail Cem, had launched a new era in bilateral
relations, based in part on a significant increase in
person-to-person contacts. These started with mutual
assistance efforts following earthquakes in both countries in
1999 and continued with exchanges in music, soccer, business,
and local government. By the initiative's second year,
Papandreou said, there were so many cross-border civil
society activities that it was impossible to count them. He
said he had promoted similar efforts in Cyprus, including a
high-profile case in which a Turkish Cypriot boy with
leukemia had been matched with a Greek Cypriot donor. These
initiatives stopped after the failed referendum in Cyprus in

2004. Papandreou said it would be important to push on
initiatives such as these when PASOK is back in power. If
the leadership empowers people to establish contacts, he
said, those contacts will happen.


10. (U) CODEL Durbin departed post prior to clearing this
cable.
SPECKHARD